Brocade acquired Ethernet switch maker Foundry Networks in 2008 for $2.7 billion and an opportunity to broaden its addressable market and obtain a foundation technology for merging FibreChannel storage and Ethernet. The Ethernet switch market is six or seven times as big as the FibreChannel SAN market so Brocade's recently acquired Ethernet assets may be more valuable than the SAN business, the WSJ postulates.

Brocade has a 2% share of the $20 billion Ethernet switch market, according to Dell'Oro Group.

HP and Oracle were also mentioned as possible suitors for Brocade two years ago. Since then, HP acquired 3Com and has been struggling to integrate that company and with other internal matters, such as a revolving door to the CEO's office.

Cisco could have an interest in that the company is looking to become a broader IT player in the data center than just a networking leader. Acquiring Brocade's FibreChannel SAN installed base could further solidify Cisco's presence in the data center and accelerate its strategy to converge FibreChannel over its market-leading Ethernet switches.

But Brocade may be more attractive to a buyout shop, the WSJ speculates, and its sources say that some U.S. private-equity firms are expected to evaluate the company.

Brocade's annual revenue is $2 billion. The company is profitable, but earnings in its most recent quarter fell to $2 million from $23 million a year ago.

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